J.P. Morgan: Hong Kong life insurers’ third-quarter new-business performance diverges, with year-end tailwinds building

Why did new-business growth look mixed in the third quarter?

In 3Q26, Hong Kong business indicators among major life insurers diverged: AIA’s new business value (NBV) fell 3% year over year, while FWD’s NBV grew 13%; PRU’s new business profit (NBP) recorded double-digit growth, Manulife’s new business contractual service margin (CSM) grew 34%, and Sun Life’s individual insurance sales grew 8%. These metrics are defined on different bases and should not be ranked directly by growth rate.
JPMorgan attributed the broadly moderate performance to the comparison base: the industry’s annualized new premiums (APE) grew 51% year over year in 3Q25, so the slowdown this quarter looks more like a normalization in sales momentum than a weakening in insurance demand.

Several companies said disruption to business from mainland visitors was limited. AIA’s combined NBV for 8–September 2026 grew 20% year over year, and the company said demand from both local customers and mainland visitors remained strong; FWD also reported double-digit growth in this customer segment during the quarter.
But visitor business is not the whole story behind Hong Kong life-insurance growth: local demand accounted for 58% of FWD’s Hong Kong NBV in 9M26, while mainland visitors accounted for 23%. PRU also noted that sales conversion had slowed for some mainland-visitor customers, indicating that resilient growth does not mean every channel is running smoothly.

AIA reiterated that full-year operating profit after tax (OPAT) would exceed guidance; FWD reiterated guidance for growth in the mid-teens in both new business and OPAT. On this basis, JPMorgan maintained its FY26 NBV forecasts, expecting AIA and FWD to grow 12% and 16%, respectively, year over year in 4Q26.
For FY27, JPMorgan expects AIA’s NBV to grow 16% year over year and FWD’s to grow 11%, and said it does not currently expect near-term growth-consensus downgrades; the bank maintained its Overweight ratings on both companies.

The yield on the U.S. 10-year Treasury was 4.82%, down 41 basis points from September 2026. JPMorgan believes lower long-term rates benefit insurers’ earnings, CSM, and solvency capital; a weaker U.S. dollar against Asian currencies could also improve related financial metrics.
In a scenario involving a 50-basis-point decline in interest rates and a 5% depreciation of the U.S. dollar against Asian currencies, AIA’s CSM sensitivities were approximately 1% and 3% increases, respectively. This reflects its U.S.-dollar policies and balance-sheet exposure, and also shows why exchange-rate and interest-rate movements are important conditions in assessing year-end support.
JPMorgan also listed stable cash generation, normalization of sales in AIA China and updates on its India business, and a recovery in FWD’s Thailand business as potential year-end catalysts.